Irish competition watchdog expressed concerns over Bank of Ireland’s proposed acquisition of KBC Bank Ireland’s performing loan assets, deposits and non-performing mortgages.

The Competition and Consumer Protection Commission’s (CCPC) assessment finds that the deal could reduce competition in the Irish mortgage market.

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The CCPC’s review, which is part of a full investigation into the proposed deal, could impact the size, structure, and value of the transaction.

Both Bank of Ireland and KBC have been given 15 days to respond to CCPC’s assessment. They can also request access to the CCPC’s file.

The deal includes €8.8bn of performing mortgages, €100m of mainly performing commercial and consumer loans, and approximately €4.4bn of deposits.

It also includes a small portfolio of non-performing mortgages (NPEs) worth nearly €300m.

Responding to CCPC’s assessment Bank of Ireland said that it “notes the CCPC’s preliminary view, at this stage of the process, is that the Proposed Transaction is likely to give rise to a substantial lessening of competition in relation to the market for the provision of mortgages in the State and that this is not the final determination by the CCPC.

“In line with normal practice, Bank of Ireland will prepare a detailed response to the assessment which will seek to address the concerns raised by the CCPC. Bank of Ireland will continue to engage co-operatively with the CCPC in advance of the CCPC’s final determination which is expected to be issued during Q2 2022.”

Based on the timelines set by the CCPC, the investigation is expected to complete by May 2022.